A code T in box 7 of 1099-R is for a Roth IRA distribution, when an exception applies. It is used for a distribution from a Roth IRA if the IRA custodian does not know if the 5-year holding period has been met but: The participant has reached age 59 & 1/2The participant died, orThe participant is disabled.Whatever the reason, the distribution is not taxable nor subject to penalty.

Question

My 1099-R for my Roth IRA distribution shows the code " T " in box 7. What gives?

Forum|Forum|6 years ago
June 6, 2019
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TurboTax Premier Online

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DavidD66

A code T in box 7 of 1099-R is for a Roth IRA distribution, when an exception applies. It is used for a distribution from a Roth IRA if the IRA custodian does not know if the 5-year holding period has been met but:

The participant has reached age 59 & 1/2
The participant died, or
The participant is disabled.

Whatever the reason, the distribution is not taxable nor subject to penalty.

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D

dmertz

Employee

Although not subject to penalty, it's entirely possible that some or all of the distribution is taxable. Be sure to click the Continue button on the Your 1099-R Entries page and answer the follow-up questions to allow TurboTax to calculate the taxable amount of this distribution.

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t231

Same issue with the 1099R. Mine is a NON-spousal inherited ROTH IRA and the bank refuses to change the code from “T” even though the ROTH was open over 5yrs while the acct holder was alive.

Will TurboTax ask follow-up questions so that the distribution is not taxable?

Will the FREE version cover this scenario? If not, which version does?

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DianeW777

Code T indicates there is no penalty because an exception applies. Some financial companies use code T instead of code Q when reporting such distributions on Form 1099-R, but since you know that it has been more than 5 years since the Roth IRA was established, code T gets the same tax treatment as code Q, entirely nontaxable and reported only on Form 1040 line 4a. In TurboTax, the taxable amount of this distribution is $0.

TurboTax will walk you through this. You will need TurboTax Online Deluxe and the software will walk you through the change.

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T

t231

Thanks @DianeW777!

I have another question regarding an inherited Traditional IRA. I inherited this IRA 8yrs ago and this is the first yr I was asked whether I need to fill out form 8606. And If the IRA had a basis? I was never asked this before. How would someone know if there was a basis? If there is no way to find out at this point what do you do?